Treasurys Sell Off After Fed 'Taper'

Delayed Reaction Hits as Traders Ponder How Market Will Respond to Further Stimulus Reduction

The Treasury market sold off sharply Thursday, a day after the Federal Reserve decided to trim its asset-purchasing program, driving the yield on the benchmark 10-year note to its highest level in three months.

Prices of 10-year notes fell 11/32 on Thursday to yield 2.923%. When bond prices fall, yields rise. The price declines followed a muted reaction in the Treasury market Wednesday, when investors bought Treasury bonds to cover their bets that the prices of U.S. government debt would fall—a successful wager that the Federal...